How many times have you texted a friend to ask for recommendations for services or vendors, from the best dry cleaners to a mechanic that won’t upcharge? Sure, you could use Yelp or Angie’s List for rated reviews, but there’s nothing more valuable than an honest recommendation from a trusted friend.
According to a Nielsen report, 92 percent of people trust recommendations from friends and family more than any other type of advertising.
But, unless the business has a built-in referral program, neither you nor they benefit from that word of mouth recommendation. And unless your contact mentions your name, the business may not realize that you’re spreading the good word about them.
Serial entrepreneur Aaron Welch and his co-founder Adam Baker founded mobile recommendation startup Woorly to close the feedback loop that follows a referral or recommendation. With the Woorly app, users send their referral through their contact list, along with a personal note.
The contact receives an email or app notification, while simultaneously the business is alerted of the referral. They can then reward the referrer with cash and follow up with the new potential customer in a personalized manner. The referred friend gets incentives, in the form of discounts, to use the referral and report back on their experience.
“There’s so much data that goes around those interactions, like the timeliness of that data, the window in which service is good or bad. You can go back through almost every Yelp review for every business, especially restaurants, and there’s a change in behavior of the recommendations and reviews and nobody can attribute why that is,” says Welch.
Those changes in behavior, which could be attributed to a bad manager, new chef, or even bad weather, can be immediately addressed with Woorly. “When a person leaves a review on Yelp, nobody circles back around. So what we want to do is to create tools to be able to facilitate those feedback loops,” Welch says.
This is Welch’s fifth startup, his third in the software space. “I always like to say that I had a home run, two early dismissals, one crash and burn, and now Woorly,” he says.
His first startup, Quickcue, was an iPad app that helped restaurants manage wait lists, track customer preferences, and reserve same day tables. It reached profitability and then sold to OpenTable in 2013 for $11.5 million.
Woorly, founded in 2017, came out of Welch’s vision to provide an end-to-end customer experience to improve the chances of small businesses staying open.
“We started asking, how do we help small businesses not fail? 90 percent of small businesses fail within the first five years. That’s a horrible statistic.”
“We did a lot of surveys with small businesses and one of the most intriguing pieces of data was how they spend their marketing dollars,” says Welch.
The team saw that 70 percent of the businesses surveyed were putting the majority of their marketing efforts into word of mouth marketing, but were unable to track the performance of those efforts. “They just figured it was working because they kept getting new customers, but didn’t know why or how,” he says.
The Chattanooga-based team was recently accepted into the Techstars Austin accelerator program where they will work to “peel back the onion and be incredibly analytical about who we’re targeting, why we’re targeting them, and how to create value in the transaction for the user to close the loop with the least amount of effort.”
During their time in Austin, they will also be undergoing a rebranding and continue development on the next iteration of the app.
Woorly has two revenue streams: first, the startup charges a transactional fee at the completion of each completed referral, and second, a subscription option for businesses to help them see a higher amount of referral transactions and save in marketing costs. The team hopes to move forward with a funding round following the completion of the Techstars program.
While Welch has experience with this market and the problem he’s working on, he acknowledges that he isn’t the first to try to tackle it. He’s pushing forward and continuing to refine their model because he’s confident that they are approaching it in a unique way.
“There are literally thousands of companies that have tried to do this and failed. They always say that the battlefield is littered with a lot of skeletons for this particular war. So we actually take a different approach in the way that we go about addressing the marketplace,” he says.
“We actually know that it is in fact a marketplace, and there are two distinct sides of this transaction.”